LONDON, March 20 (Reuters) - Copper slumped to its lowest level in more than three months on Tuesday as rising inventories highlighted healthy supplies.

Concern about trade wars, higher U.S. interest rates and a stronger dollar also weighed on industrial metals markets.

London Metal Exchange prices extended losses in the European afternoon as U.S. computer-driven funds stepped up selling.

“The U.S. has opened up and they’re carrying on the negative sentiment,” said Geordie Wilkes, head of research at Sucden Financial.

In the morning, copper was hit by data showing LME copper stocks MCUSTX-TOTAL grew by a further 3,200 tonnes on Tuesday to 322,475 tonnes, bringing this month’s rise to 61 percent.

While some investors have been worried that potential strikes at copper mines could create shortages, this was not a major threat given robust supplies, said Caroline Bain, chief commodities economist at Capital Economics.

Some labour deals have already been sealed while progress was announced on Tuesday in wage talks at Antofagasta’s Los Pelambres copper mine in Chile.

“We’ve been forecasting from the beginning that copper prices would fall this year because we just didn’t think the market was that tight,” Bain said, adding that her year-end target was $6,500.

Three-month LME copper closed 1.4 percent down at $6,755 a tonne, marking a fourth session of losses. It had dipped as low as $6,730, its weakest level since Dec. 14.

* ZAMBIA: Further highlighting growing copper supplies, Zambia said it expects to produce more than a million tonnes this year after revising its 2017 copper production upwards on the back of stable power supply.

* TRADE WARS: Also weighing on markets were fears of a global trade war after U.S. President Donald Trump imposed hefty import tariffs on steel and aluminium. Sources in Washington said he was also poised to unveil new tariffs targeting China by the end of this week.

* ZINC STOCKS: LME zinc stocks have shot up MZNSTX-TOTAL by 60 percent this month, climbing by another 5,350 tonnes on Tuesday to 211,400 tonnes.

* USD: The dollar rose broadly on Tuesday, hitting a one-week high against the yen, as investors awaited interest rate clues from the Federal Reserve on Wednesday.

Higher U.S. rates could support a rising dollar, which would limit demand for dollar-denominated commodities such as copper.

* ALUMINIUM: LME aluminium fell by 0.6 percent to close at $2,076 a tonne, with losses moderating after Japanese buyers agreed to pay producers premiums during the second quarter that are 25 percent higher than the previous quarter, reflecting rising spot premiums in the United States.

* PRICES: Lead dropped 0.7 percent to close at $2,351 a tonne, nickel lost 0.2 percent to $13,450 and tin was down 0.5 percent at $20,675.

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Additional reporting by Tom Daly in Beijing
Editing by Louise Heavens and David Goodman